Best Buy Co. Inc. (NYSE:BBY)

The financial data reveals several notable trends and shifts over the six-year period examined.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrates an overall increasing trend from 2017 to 2022. Starting at $1,602 million in 2017, it experienced a decline in 2018 to $1,296 million but rebounded in subsequent years, reaching $2,817 million in 2022. This reflects significant improvement in operational profitability after taxes over time, particularly from 2020 onwards.

Cost of Capital

The cost of capital fluctuated moderately across the years, ranging between 15.49% and 17.33%. The highest cost was recorded in 2021 at 17.33%, while the lowest was in 2020 at 15.49%. These variations indicate shifts in the company's financing costs or perceived risk profile, with a slight decrease in the most recent year relative to 2021.

Invested Capital

Invested capital showed variability with a general upward trend that peaks in 2021 before declining in 2022. The value increased from $6,613 million in 2017 to a high of $9,079 million in 2021, but then dropped to $7,721 million the following year. This suggests periods of capital expansion followed by consolidation or divestment.

Economic Profit

Economic profit exhibited growth with some fluctuations, moving from $542 million in 2017 to a significantly higher $1,511 million by 2022. After declining from 2017 to 2019, economic profit increased markedly post-2019. The growth in economic profit notably outpaced the expansion of invested capital, indicating improved value creation and efficiency in capital utilization in recent years.

Overall, the data indicates that profitability and value creation improved substantially from 2019 onward, supported by rising NOPAT and economic profit despite fluctuations in invested capital and cost of capital. The company appears to have enhanced operational efficiency and managed capital more effectively, especially in the last two years of the period analyzed.

The financial data reveals a consistent upward trend in both the net earnings and the net operating profit after taxes (NOPAT) over the examined six-year period. Each year, there is a notable increase compared to the previous period, indicating improving profitability and operational efficiency.

Net Earnings

Starting at $1,228 million in the year ending January 28, 2017, net earnings experienced a decrease in the following year to $1,000 million. However, from 2018 onward, net earnings resumed growth, reaching $1,464 million in 2019, further increasing to $1,541 million in 2020 and $1,798 million in 2021. The most significant growth within the period occurred between 2021 and 2022, with net earnings rising sharply to $2,454 million, marking the highest point in the data set.

Net Operating Profit After Taxes (NOPAT)

NOPAT also demonstrated an overall upward trajectory, beginning at $1,602 million in 2017. It decreased to $1,296 million in 2018, mirroring the decline observed in net earnings. Subsequently, NOPAT increased to $1,580 million in 2019 and continued to grow to $1,799 million in 2020. This positive momentum persisted, with NOPAT reaching $2,197 million in 2021 and further rising to $2,817 million in 2022. The increase in NOPAT in the final year also represents the most substantial annual gain within the timeframe.

In summary, following a temporary dip in 2018, both profitability measures—net earnings and NOPAT—display strong recovery and growth throughout the remaining years. The sustained increase, particularly pronounced in the last two years of the data, signals enhanced profitability and operational success for the company during this period.

Income Tax Expense

The income tax expense shows considerable fluctuations over the examined periods. It increased substantially from 609 million US dollars in early 2017 to 818 million in 2018, indicating a significant rise. Subsequently, there was a sharp decline to 424 million in 2019, followed by a slight increase to 452 million in 2020. The expense rose again in 2021 to 579 million but stabilized in 2022, with a minor reduction to 574 million. Overall, the trend presents volatility with a notable peak in 2018 and some stabilization towards later years.

Cash Operating Taxes

Cash operating taxes followed a somewhat parallel pattern to income tax expense but with distinct variations. Starting at 495 million in 2017, the figure surged to 720 million in 2018, closely mirroring the peak in income tax expense. It then declined sharply to 452 million in 2019 and dipped further to 415 million in 2020, marking the lowest point in the series. A pronounced increase occurred in 2021, reaching the highest value of 642 million, before decreasing again to 579 million in 2022. This pattern indicates a strong correlation with income tax expense, coupled with a more pronounced recovery peak in 2021.

Comparative Insights

Both income tax expense and cash operating taxes display significant year-to-year variability, with peaks in 2018 and 2021. The data suggests that while both metrics tend to move in tandem, cash operating taxes exhibit more substantial relative changes, particularly during 2020 to 2021. The decline observed in 2019 and 2020 in both categories could reflect operational or tax policy changes, whereas the rebound in 2021 indicates a possible recovery phase. By 2022, both measures tend to stabilize, remaining close in value compared to earlier years.

The financial data reveals several notable trends in debt, equity, and invested capital over the six-year period from 2017 to 2022.

Total Reported Debt & Leases

The total reported debt and leases remained relatively stable throughout the period, fluctuating narrowly around the range of approximately 3,900 to 4,100 million US dollars. There was no significant upward or downward trend, indicating consistent leverage levels over the years.

Total Shareholders’ Equity

Shareholders’ equity demonstrated a declining trend overall, starting from 4,709 million US dollars in early 2017 and falling to 3,020 million by early 2022. This decline was not linear; there was a drop between 2017 and 2019, a partial recovery in 2021, and then a further decrease by 2022. The equity fluctuations suggest variability in retained earnings or other comprehensive income components, as well as possible impacts from share repurchases or dividend policies.

Invested Capital

Invested capital experienced notable fluctuations across the period. It decreased substantially from 6,613 million in 2017 to 5,407 million in 2018, followed by a significant increase to its peak of 9,079 million in 2021. By 2022, there was a reduction but invested capital still remained elevated relative to the 2017 and 2018 levels. These movements indicate shifts in the company’s investments in assets potentially funded through a combination of liabilities and equity, reflecting strategic growth or restructuring activities.

In summary, the company maintained stable debt levels while shareholders’ equity decreased over time. Invested capital showed considerable volatility with a marked increase toward 2021, implying dynamic capital allocation decisions during the period. The divergence between stable debt and declining equity could impact the company’s leverage ratios and financial risk profile, warranting further analysis on profitability and cash flow to assess overall financial health.

Economic Profit

The economic profit exhibited variability over the six-year period, starting at 542 million USD in early 2017, experiencing a decline for the subsequent two years to a low point of 378 million USD in early 2019. After this decline, economic profit increased steadily, reaching 623 million USD in early 2021, followed by a pronounced surge to 1,511 million USD by early 2022. This suggests improved operational efficiency or profitability in recent years.

Invested Capital

Invested capital showed fluctuations throughout the period. It decreased from 6,613 million USD in early 2017 to 5,407 million USD in early 2018, then increased notably to peak at 9,079 million USD by early 2021. However, it slightly declined thereafter to 7,721 million USD in early 2022. This pattern indicates periods of divestment followed by significant investment expansion, with a recent partial reduction in capital invested.

Economic Spread Ratio

The economic spread ratio, which reflects the return on invested capital over the cost of capital, also varied significantly. Beginning at 8.2% in early 2017, it reached its lowest point at 5.24% in early 2019, paralleling the trends seen in economic profit. Thereafter, the ratio rebounded to 8.02% in early 2020, dipped slightly to 6.87% in early 2021, and then experienced a substantial increase to 19.58% by early 2022. The pronounced increase in the latest period suggests a marked improvement in value creation relative to capital costs.

The financial data exhibits several notable trends over the six-year period ending in January 2022. The adjusted revenue shows a consistent upward trajectory, increasing from approximately 39.5 billion US dollars in 2017 to over 52 billion US dollars in 2022. This steady rise indicates a pattern of revenue growth year-over-year.

The economic profit fluctuates in the initial years, starting at 542 million US dollars in 2017, dipping to 378 million in 2019, then recovering to 623 million in 2021 before sharply increasing to 1.51 billion in 2022. This indicates a period of variability in profitability, followed by a strong improvement in the final year observed.

Economic profit margin mirrors these profitability trends but shows a more marked variation. The margin fell from 1.37% in 2017 to below 1% in 2018 and 2019, suggesting decreasing efficiency or increased costs relative to revenue in those years. It then improves to 1.4% in 2020, slightly dips to 1.31% in 2021, and substantially rises to 2.9% in 2022, which represents a significant enhancement in economic profitability relative to revenue.

Adjusted Revenue

Demonstrates steady year-on-year growth, reflecting increasing sales or service income over the period.

Economic Profit

Shows volatility in the mid-years before a pronounced increase in the final year, indicating challenges followed by improved profit generation.

Economic Profit Margin

Follows a pattern of initial decline and stabilization, ending with a substantial increase in 2022, signifying improved profit efficiency.